The Group of Ministers (GoM) set up to make the GST composition scheme more attractive held its first meeting in New Delhi. The five members GoM, headed by Assam Finance Minister Himanta Biswa Sarma has been tasked to examine the way to make composition scheme more attractive.
The other members of the GoM are Bihar Deputy Chief Minister Sushil Modi, Jammu and Kashmir Finance Minister Haseeb Drabu, Punjab Finance Minister Manpreet Singh Badal and Chhattisgarh Minister of Commercial Taxes Amar Agrawal.
With only over 15.50 lakh businesses out of 98 lakh registered under the GST regime opting for the composition scheme, the GST Council decided to set up the GoM to examine ways of making it more attractive. Businesses with turnover of up to Rs 1 crore can opt for the composition scheme and they can pay taxes in the range of 1-5 per cent and file returns quarterly.
The GoM has also been tasked with revisiting the tax structure of different categories of restaurants with a view to rationalising or reducing the rates. The GoM will examine whether the AC restaurants pass on the benefit of cost reduction under GST to consumers and if they are not, whether they should be disallowed input tax credit claims.
The GST Council, in its last meeting, hiked the threshold for availing of the composition scheme to Rs 1 crore, from the Rs 75 lakh set earlier. The tax rate for traders of goods in the composition scheme is 1 per cent, while it is 2 per cent for manufacturers and 5 per cent for restaurants.